Inventory supply sustainability is a crucial consideration for stakeholders in the agricultural value chain. This factor is particularly vital for distributors and intermediaries not involved in the production process and are primarily reliant on farmers or other distributors for their supplies.
Since distributors do not directly impact the production process, they have the responsibility to promote sustainability through ethical sourcing and fair procurement practices.
In organizations like Sunbeth global concepts, local business agents are primarily responsible for inventory sourcing, with support from field operations and sustainability officers. This situation establishes the need for collaboration between the teams.
The nexus between the sustainability and procurement teams is predicated on procurement’s role in sustainability and how sustainability considerations influence procurement processes.
Members of Sunbeths’ procurement, and field operations team recently participated in a seminar organized by the sustainability department on the relationship between sustainability and procurement. There, they learned how the teams can work together to promote sustainability in the company’s processes.
Field Operations and Procurement Team Members During the Training
Procurement’s Role in Sustainability
Sustainability entails fulfilling the requirements of current generations without compromising the needs of future generations while ensuring a balance between economic growth, environmental care, and social well-being. A sustainability-centric procurement process incorporates the following practices.
Sustainable Procurement
Sustainable procurement is a purchase approach that takes into account the economic, environmental and social impacts of an organization’s buying choices at all times.
Sustainable procurement integrates the governance, social and environmental considerations in corporate responsibility into procurement decision-making while ensuring there are no significant compromises on stakeholder requirements. It aims for the most positive social impacts and the lowest adverse environmental effects.
Committing to a policy of sustainable sourcing also involves ensuring the sustainability values that are core to the business are transferred through the organization’s supply chain into the lifecycle of the organization’s products and services.
The procurement team at Sunbeth Global Concept upholds these ideals by sourcing good-quality cocoa from trained farmers through identified brokers and LBAs. It collaborates with the sustainability team to identify trained and registered farmers in the company’s database and across its certified regions.
The team also seeks out suppliers who prioritize sustainable practices, such as using eco-friendly materials, reducing waste, or implementing fair labour standards. The team encourages suppliers to adopt sustainable practices by including sustainability criteria in their supplier selection process.
Effective Demand Management
Effective demand management incorporates forecasting, planning, and managing customer demand to maximize supply operations and inventory levels. It involves analyzing historical purchasing data and understanding the organization’s needs.
The procurement team contributes to resource conservation and waste reduction by ensuring that supplies are procured in an efficient and sustainable manner. It leverages available resources to optimize procurement processes to reduce waste and minimize environmental impact.
Procurement Risk Management
Procurement risks are events, situations or occurrences that may be negatively disruptive to a company’s operation courtesy of a procurement process. For example, supply chain disruptions due to resource scarcity, reputational damage resulting from unethical supplier practices, or regulatory non-compliance related to environmental regulations can disrupt an organization’s operations.
The procurement team must understand and align its goal with the organization’s sustainability policies and vision. Therefore, it must be proactive in identifying, auditing, and managing all internal or external risks related to procurement practices. It must also determine potential opportunities in its operations and how they could impact the company’s overall profit.
Considerations for Future Business
As mentioned earlier, sustainability entails satisfying current needs without jeopardizing the ability of future generations to take care of theirs. Hence, at the core of sustainability is a primary consideration for future generations.
While going about their activities, the procurement team must consider how their choices in the present affect the company and overall agriculture industry in the future. The procurement team must ensure their current decisions create a solid foundation for future transactions.
One of the ways they’ll achieve that is by collaborating and developing excellent relationships with suppliers to ensure the posterity of business transactions with them. Plus, by working closely with suppliers, the team can communicate the organization’s sustainability goals and encourage suppliers to align their practices accordingly.
The procurement team plays a critical role in promoting sustainability within organizations, particularly, Agri-produce distributors like Sunbeth Global Concepts. They can drive positive change towards a more sustainable future by leveraging their position to prioritize sustainable sourcing, collaborating with suppliers, and managing demand efficiently.
But, of course, this would be easily achieved with more collaborative efforts between the procurement and sustainability teams. Involving the sustainability department in the process makes it easy for the procurement team to adhere to sustainability standards.
